Cryptocurrencies: our best and worst friend

This is the first in a series of articles in which Tech Beach Retreat will open the conversation on various emerging technologies ahead of its upcoming summit in Montego Bay, St James, from November 29 to December 1, 2018. Tech Beach is on a mission to spark an entrepreneurship and innovation revolution in the Caribbean. In order for this mission to be successful, a shift will have to occur, and we need to revisit the way our people are trained and what they are trained in.

Cryptocurrency, at times, seems to be the talk of the day… and then it's not. It truly embodies the highest highs and lowest lows. But what exactly is this cryptic entity?

Cryptocurrency is decentralised digital currency that can operate on peer-to-peer networks to complete transactions on a public ledger called the blockchain. Techno-babble, right?

Assume that there is coin potentially worth thousands of dollars but not made of any precious metal such as platinum or gold, a coin that has no physical presence and can't be tangibly locked in a vault like traditional currency. A coin which is not backed by any government authority or bank, but instead runs completely on a mathematical equation with predetermined results. This is our beloved cryptocurrency.

Its value is that it is a digital currency that is built upon a system which can be used to make peer-to-peer electronic transactions without relying on any central entity such as bank or government. In other words, it is a decentralised network where peers can execute and validate financial transaction, on the public ledger, called blockchain, while removing the intermediaries to save transaction fees and make transactions fast and efficient.

So what? We already have money. How does it differ from traditional currency?

Cryptocurrency can be differentiated from traditional fiat currency in a number of ways. Firstly, it has no physical appearance. Additionally, like most traditional currency, the supply mechanism of cryptocurrency isn't controlled by any central authority or regulatory body. Instead, it is controlled by an autonomous mechanism with predetermined results, and unlike traditional fiat money, cryptocurrency is not obliged by the geographical location of users.

Digital currency ceases to exist without an entire network of computers (also called the miners or nodes) and the magic of computer science called cryptography. Users are able to join the network of their choice (Bitcoin is one of the most popular options, but there are many others) and then can use the coins to make purchases, send money to other people, and so much more. This currency runs completely online, which means that you are unable to print the currency, as you can with traditional fiat money.

Cryptocurrency comes in the wave of the new era of the 4th Industrial Revolution

Though we haven't quite figured out what space exactly cryptocurrency will occupy in our financial system, cryptocurrencies have become increasingly commonplace in conversation and transactions. People have started using cryptocurrencies in daily life to buy goods and services, merchants have started accepting cryptocurrencies as payments. Investors are starting to pay greater attention to cryptocurrency with the continued development of crypto trading and investment. This massive adoption of cryptocurrencies has also given birth to thousands of them, and today the total number of cryptocurrencies has increased to 1,300 and new ones are being added almost every day.

Expect cryptocurrencies to be a big part of our conversations, and likely our transactions, in the not-too-distant future!

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